Читать книгу Tax Planning and Compliance for Tax-Exempt Organizations - Jody Blazek - Страница 38

Whether an art collection must be displayed to the public to be deemed “primarily held for charitable purposes” is an interesting and important question. In the Tikar case discussed earlier, ask why it isn't a charitable activity to simply protect from harm, conserve or repair, and/or simply safely store such assets for some future use if the items are historic, fragile, or highly valuable and require special care. Many museums possess and hold artworks that they are not necessarily able to display for a number of reasons. The facts of the Tikar case didn't make it clear why the art was not displayed adequately, so it doesn't stand for there being a reason art may be temporarily stored or stored safely from ongoing public display.

In another example, the lack of details and dates makes one wonder why the ruling was issued. It reports that ORG was granted tax-exempt status in 19XX under IRC § 501(c)(3) and § 509(a)(2). ORG was established for the purpose of engaging in activities that would provide affordable housing to low-income individuals. Some unspecified years later, in November 20XX, ORG's Form 990 was selected for examination and it was discovered that ORG had not conducted any activities related to its charitable purposes since its inception. ORG's president stated that they had not begun and had no plans to begin any operations to provide affordable housing. Based on the president's testimony, the Service proposed revocation of ORG's tax-exempt status effective January 1, 20XX. ORG's president consented to the proposed revocation and signed Form 6018, Consent to Proposed Action. The Service (reasonably) held that ORG was not operating exclusively for exempt purposes as required by Sec. 501(c)(3), since ORG had not been engaged in activities to further its exempt purpose. Rather, the Service found that ORG's activities furthered a substantial nonexempt commercial purpose and served private rather than public interests. Because ORG did not protest the proposed modification of their non–private foundation status and signed Form 6018, the Service issued a final adverse determination that ORG's exempt status was revoked.⁹